The National Automobile Dealers’ Association (NADA) has welcomed the decision from the South African Reserve Bank to lower interest rates by 25 basis points.
NADA Chairperson Brandon Cohen said that with South African consumers facing major financial pressure, the rate cut is a positive move.
“While it’s not a dramatic kick-start to the economy, it does serve as a much-needed nudge in the right direction,” said Cohen.
He said that while the rate reduction is modest, the short-term relief comes at an important time, with other household cost increases like the fuel levy hike on the way in June.
“Even small savings on monthly bond repayments, credit cards, and vehicle finance do add up,” said Cohen.
“They can make a meaningful difference for consumers who are having to make every rand count.”
Cohen added that rate movements usually take several months before they are visible in vehicle sales, but they do have a material impact.
“A rate cut helps to build consumer confidence and creates slightly more room for discretionary spending,” said Cohen.
Automotive sector not in the clear
Cohen cautioned that while this is a positive move, it is far from enough to drive a strong recovery in South Africa’s automotive industry.
“Sustained economic strain and high unemployment remain significant barriers to growth in the automotive sector,” said Cohen.
“Any positive shift is welcome – but the road to recovery will require more than just lower interest rates.”
This insight comes as the latest AutoTrader data shows that 28,675 used vehicles were sold in April 2025 – down 0.2% year-on-year and 4.1% month-on-month.
However, NADA data also found that there was a 16.9% year-on-year increase to new vehicle sales in April 2025 – which it described as a “welcome surprise in a climate of high interest rates and constrained consumer spending.”
Key to this growth, NADA said, is the rise of Chinese auto brands that are “shaking up South Africa’s motoring landscape.”
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